KATHERINE K. MORGAN, as wrongful death representative of the deceased person, David P. Morgan, Plaintiff-Appellant,
BAKER HUGHES INCORPORATED, a Delaware corporation, Defendant-Appellee.
from the United States District Court for the District of
Wyoming (D.C. No. 1:14-CV-00210-SWS)
Landers Vickery, Vickery & Shepherd, LLP, Houston, Texas
(Arnold Anderson Vickery, Vickery & Shepherd, LLP,
Houston, Texas; Frederick J. Harrison, Frederick J. Harrison,
PC, Cheyenne, Wyoming, on the briefs), for
Stephen P. Laitinen, Larson King, LLP, St. Paul, Minnesota
(Stephenson D. Emery, Williams, Porter, Day & Neville,
PC, Casper, Wyoming; Mark A. Solheim, Larson King, LLP, St.
Paul, Minnesota, on the briefs), for Defendant-Appellee.
LUCERO, HOLMES, and MORITZ, Circuit Judges.
LUCERO, CIRCUIT JUDGE
Morgan, as wrongful death representative of her husband,
David Morgan, brought direct negligence liability claims
against Baker Hughes Incorporated ("Baker Hughes")
for the acts of its subsidiary, Baker Petrolite Incorporated
("Baker Petrolite"). This appeal requires us to
interpret Wyoming law regarding the level of control
necessary to hold a parent corporation liable in direct
negligence for the acts of its subsidiary. We conclude that
Wyoming law on this issue is consistent with the Restatement
(Second) of Torts § 414 and its commentary. Accordingly,
we hold that the district court correctly instructed the jury
with respect to the relevant legal standard and did not err
in making various decisions Morgan challenges on appeal.
Exercising jurisdiction under 28 U.S.C. § 1291, we
August 16, 2012, David Morgan was crushed to death by a heavy
chemical tote while operating a forklift at his place of
employment, a warehouse in Casper, Wyoming. The warehouse was
owned by Baker Petrolite, a subsidiary of Baker Hughes.
Following the fatal accident, David Morgan's widow,
Katherine Morgan, sued Baker Hughes, claiming that its
negligent control of safety operations at the Casper
warehouse caused her husband's death.
have been two trials in this case. At the close of
Morgan's evidence in the first trial, Baker Hughes moved
for judgment as a matter of law. The district court granted
Baker Hughes' motion. We reversed on appeal, holding that
Morgan had presented sufficient evidence for a reasonable
jury to conclude that Baker Hughes was liable for David
Morgan's death. Morgan v. Baker Hughes Inc., 728
Fed.Appx. 850, 854, 858 (10th Cir. 2018) (unpublished)
doing, we interpreted Wyoming law on the liability of parent
corporations for the acts of their subsidiaries. Under
Wyoming law, "a parent company can only be held liable
for the acts of its subsidiary where it assumed some
independent legal duty by retaining or exercising control
over some aspect of the operation of a subsidiary corporation
which was involved in the incident resulting in the
plaintiff's injuries." Id. at 854. We cited
Loredo v. Solvay America, Inc., 212 P.3d 614 (Wyo.
2009), as setting forth the requisite level of control.
Morgan I, 728 Fed.Appx. at 854. In Loredo,
the Wyoming Supreme Court held that for a parent to escape
liability for the acts of its subsidiary, the subsidiary must
be "entirely free to do the work its own way." 212
P.3d at 622. Applying this test, we phrased the question
presented in Morgan I as "whether the evidence
presented at trial, viewed in the light most favorable to
plaintiff, is reasonably susceptible to the inference that
Baker Hughes controlled operations at the Casper warehouse
'to such a degree that it directed how' forklift
safety 'should or should not be done.'" 728
Fed.Appx. at 854 (quoting Loredo, 212 P.3d at 624).
Because we concluded that Morgan's evidence was
sufficient to support such an inference, we reversed the
district court's judgment and remanded for further
proceedings. Id. at 858.
second trial ensued. This time, Morgan moved for judgment as
a matter of law. The district court denied the motion, and
the jury returned a verdict in favor of Baker Hughes.
However, before submitting the case to the jury, the court
rejected Morgan's proposed jury instructions and
overruled her objections to the court's instructions.
Morgan timely appealed these decisions and moved to certify
the controlling question to the Wyoming Supreme Court.
has explicitly rejected any doctrine of respondeat superior
resulting in liability on the part of a parent corporation
for acts of its subsidiary." Id. at 854
(quoting Loredo, 212 P.3d at 620). "Instead, a
parent company can only be held liable for the acts of its
subsidiary where it assumed some independent legal duty by
retaining or exercising control over some aspect of the
operation of the subsidiary corporation which was involved in
the incident resulting in the plaintiff's injuries."
Id. Merely advising a subsidiary on safety matters
is not enough. See Fiscus v. Atl. Richfield, 773
P.2d 158, 162-63 (Wyo. 1989). "General, generic,"
and optional guidelines are therefore insufficient to
establish liability. Loredo, 212 P.3d at 625. In
contrast, a parent corporation does not escape liability
under this standard unless the subsidiary is "entirely
free to do the work its own way." Id. at 622.
issues presented in this appeal turn on the same inquiry. As
Morgan puts it, "[t]he disposition of this case depends
on whether the test for direct negligence is the same in the
parent-subsidiary context as in the independent contractor
context" under Wyoming law. Morgan argues that Merit
Energy Co. v. Horr, 366 P.3d 489 (Wyo. 2016), provides
the correct standard, taken from § 414 of the
Restatement (Second) of Torts. Baker Hughes argues that
Loredo provides the correct standard. We conclude
that both Horr and Loredo announce the same
requisite level of control, drawn from § 414.
recognized in Morgan I, the Wyoming Supreme Court
has held the "requirement that the parent assume some
independent legal duty by retaining or exercising control
over some aspect of the operation of a subsidiary" is
"[e]ssentially . . . the same test that is involved in
considering an owner's liability to the employee of a
contractor." 728 Fed.Appx. at 854 n.1 (quoting
Fiscus, 773 P.2d at 160). Accordingly, independent
contractor cases provide guidance in assessing the level of
control necessary for a parent corporation to be held liable
for the acts of its subsidiary.
Jones v. Chevron, U.S.A., Inc., 718 P.2d 890 (Wyo.
1986), an independent contractor case, the Wyoming Supreme
Court explained that § 414 provides "[t]he link
between control and owner liability." Id. at
895. Interpreting that section, the court held that the owner
of a work site owes a duty of reasonable care to the employee
of an independent contractor if the owner " retains
the right to direct the manner of an independent
contractor's performance, or  assumes affirmative
duties with respect to safety." Id. at 896. The
court recognized that under this standard, "[a]n owner
does not have to retain a great deal of control over the work
to be liable for an employee's harm under §
414." Id. at ...